The mystery of GoodRx, etc.

For the first time in decades I am using the health care system, including prescription medication. Medicare and Medigap coverage take care of my medical bills. Part D prescription coverage is another matter. The coverage and cost of prescription drugs is a maze, a mystery- nobody knows what the real cost of a prescription is. Retail list prices, discounts, rebates, tiers, generics add to the confusion.

I recently filled two prescriptions. One cost me $5.33 paid for by my plan. The second I was told was not covered – I’m still investigating that. Both were generics. The second was going to cost me $217, but then I pulled up my GoodRx app and I paid $107 instead. Go figure

NOTE: If you use Good Rx or a similar program, what you pay will not be applied to your insurance deductible so you need to look at your total potential Rx costs for the year to see your best option.

A PBM (pharmacy benefit manager) establishes a network of pharmacies that allows consumers with prescription drug insurance to readily fill their prescriptions. Network pharmacies accept discounted pricing in exchange for access to a plan’s members. A PBM’s network rates are generally far below the pharmacy’s U&C list price, especially for generic drugs. PBMs typically require pharmacies to accept discount cards to remain in the PBM’s pharmacy network.

That’s why a consumer without insurance saves money by having access to a PBM’s network rate, which is lower than the cash price. GoodRx provides a convenient and user-friendly interface for finding these PBM rates. Essentially, GoodRx is a PBM-backed program that passes a portion of rebates and network discounts off list directly to patients at the point of sale.

For a patient with insurance, benefit design and network rates can differ among PBMs. This difference creates an unusual arbitrage opportunity that lets the patient reduce out-of-pocket expenses by accessing the rates of another PBM. 

GoodRx partners with multiple PBMs, including Express Scripts, OptumRx, MedImpact, and Navitus. Uninsured patients therefore avoid paying a retail pharmacy’s inflated U&C retail price for their prescriptions. Here’s an excerpt from page 24 of the S-1:

[Click to Enlarge]

This is why GoodRx defines its program’s “savings” as “the difference between the list price for a particular prescription at a particular pharmacy and the price paid by the GoodRx consumer for that prescription utilizing a GoodRx code available through our platform at that same pharmacy.” (emphasis added)

Patients would save even more if pharmacies set their U&C cash prices more reasonably. But most pharmacies won’t do so, because of their PBM contracts. Cash-pay generic programs are a minor exception.

The prescriptions available via GoodRx are not considered cash-pay, because the claims are adjudicated by a PBM. The PBM collects a per-prescription fee from the pharmacy whenever a consumer uses a discount program at a pharmacy. The PBM shares a portion of this fee with GoodRx, which directed the patient to the pharmacy.

GoodRx earns either a percentage of the pharmacy’s fee or a fixed fee per prescription.

Source of the above:


  1. I’ve had a high-deductible plan with an HSA for 10 years. I like the idea of managing your own healthcare costs. That said, healthcare costs in general and prescription drugs in particular – are a mystery as you point out. I use my company plan and the cost (to me) for the generic drugs I get is $0 (as long as your use the preferred pharmacy). I don’t know what the company pays.


  2. Thanks Dick, always the educator …
    When I get a prescription that’s got to be filled at a pharmacy I use Good Rx and I also compare with the Single Care app… then off to the closest cheapest pharmacy. Luckily these days pharmacies are like Starbucks, one on every corner….


  3. I am a federal retiree under the CSRS system. I have Medicare A and B (I pay $340 per month) and the Blue Cross/Blue Shield Federal Employee Program (I pay $276 per month) as my backup. I’m on six prescriptions, the most expensive is $15 for a 90 day supply. My total prescription costs for 2021 was $215. $616 a month for health insurance may seem prohibitive to some, but it works our fairly well for me. I have never used the Good R/X app.


    1. I am a USAF retire, I pay a Medicare premium of 340.20 for my wife and I. Medicare pays 80% and Tricare for Life pays the 20% co-pay. I get prescriptions filled for free at any military pharmacy. The few times that I had to use a retail pharmacy co-pay was $10 to $30. My wife and I had zero out of pocket costs in 2021.


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